“Whitney points out that incredibly state spending is at record highs and most muni bond investors are only looking at yield and maturity and, remarkably, none of the fundamentals.  This is not the time to own muni bonds for a number of reasons. Interest rates will soon start on a multi-year climb and there will be many muni defaults which will scare the entire muni sector. The only thing that can prevent the muni bankruptcies is Fed money printing, which will enable governments to pay off debt in cheaper dollars, but this is price inflation, which will mean higher interest rates and declining bond prices.”

http://www.economicpolicyjournal.com/2012/09/meredith-whitney-on-very-scary.html

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